Two main observations: 1) America appears to be experiencing the first significant wave of economic populism in many decades; 2) Obama's Treasury Department policymakers and staff of economic advisers appear to be unaware of this or to understand what it means (see Tom's post of February 10).
A series of Frank Rich columns in the New York Times over the past several weeks brilliantly exposed this political blindness or insensitivity. And the Times is still hammering home the basic point--a story from yesterday showed the troubling ties that Lawrence Summers (never known for his political acumen) has to hedge funds.
Watching the political missteps leads me to believe that the Obama administration needs a Rustbelt Intellectual at Treasury or on the staff of economic advisers. I use that term to refer to the spirit of this blog's many posts and reader comments--as a shorthand to mean only that the administration economic policy needs a voice from someone---anyone--who can truly empathize with the common American, with the working and middle classes.
Yet the story on Summers indicates the difficulties that Obama faces in balancing politics and policy. How can we reconcile the interests and concerns of the common American with the arcane world of 21st-century finance?
Given the highly technical nature of our current financial crisis, does Obama have any other choice than to hand over the keys to the policymaking to folks who presided over and arguably contributed to the crash? Would providing a seat at the table for a spokesperson for the middle and working classes simply put that person in over their head? Are the concerns of working families hopelessly naive and likely to worsen the crisis if made a driving force in policy? In other words, would a Rustbelt Intellectual just mess everything up?
In the short term, it appears that handing economic policy over to technocrats is politically risky. In the long term, it may be our only option: Americans may just have to hold their noses and hope the Wall Street tycoons both in the Obama administration and on Wall Street can save the nation.